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Hows your Permanent Portfolio doing?
Old 04-26-2020, 03:19 PM   #1
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Hows your Permanent Portfolio doing?

Anyone using the Permanent Portfolio AA?
Seems to me the biggest variable is precisely how you hold the Gold. Bars in your own basement/safe deposit box, or a service that holds the bars but does NOT leverage or speculate with them to earn excess income, or a Fund/ETF that of course DOES leverate or speculate with them.
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Old 04-26-2020, 03:58 PM   #2
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Old 04-27-2020, 10:36 AM   #3
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Interesting how little interest is shown in this thread.

I hold gold coins, Kruggerands, Maple Leafs, Eagles in safe deposit boxes. For "paper gold" Sprott has a closed-end fund Sprott Physical Gold Trust, PHYS. It holds fully allocated gold bullion, held by the Royal Canadian Mint. Shares can be redeemed for bullion although I believe the amounts involved as well as the process would be impracticable for the ordinary person.

Pretty much no one worries about the debt anymore, be it Federal, State, Corporate or personal. There's a pandemic so right away everybody (well almost) gets a check. One member of congress wants to make it monthly. Unemployment compensation is increased to a level that makes work unprofitable. Student loans should be forgiven, states that have made promises to their public employee unions that are unsustainable should be bailed out, if you don't pay your mortgage the bank should be accused of predatory lending. Presidential candidates rail about the Federal debt (Obama, Trump) then when in office oversee huge increases.

Despite all this our fiat currency is the reserve currency of the world, no longer backed by anything but faith. Things can change fast. For an example of the herd mentality look at toilet paper.
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Old 04-27-2020, 10:53 AM   #4
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Quote:
Originally Posted by upset264 View Post
Interesting how little interest is shown in this thread. ...
I think it is because very few here consider gold and other precious metals to be a legitimate investment asset class.

On the rest, for better or worse, the United States is the prettiest horse in the glue factory.
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Old 04-27-2020, 11:32 AM   #5
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Quote:
Originally Posted by Bongleur View Post
Anyone using the Permanent Portfolio AA?
Seems to me the biggest variable is precisely how you hold the Gold. Bars in your own basement/safe deposit box, or a service that holds the bars but does NOT leverage or speculate with them to earn excess income, or a Fund/ETF that of course DOES leverate or speculate with them.
The Permanent Portfolio is doing great this year - as are several other defensively-oriented allocations (both those that include gold such as the PP, Golden Butterfly and All Seasons, as well as the gold-free Larry [Swedroe] Portfolio. This post from Portfolio Charts tells the tale:

https://portfoliocharts.com/2020/03/...painful-month/

Regarding gold, there are plenty of good options. IAU and AAAU are two of the best ways to own physical gold in the ETF space and are quite popular with PP fans.

I think the Portfolio Charts post and other data on that site make it quite clear that many folks would be well-advised to consider portfolios like these with far higher SWR's and far lower Ulcer Indexes (a very useful part of the site) than the usual Boglehead stuff.
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Old 04-27-2020, 01:31 PM   #6
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Originally Posted by pb4uski View Post
I think it is because very few here consider gold and other precious metals to be a legitimate investment asset class.

On the rest, for better or worse, the United States is the prettiest horse in the glue factory.

I bet those who do not consider gold and pm's a legitimate investment class would be surprised to learn that from Jan. 1, 2000 to date the GLD ETF returned 197.98% vs. 96.27% for the S&P 500. Gold beats the S&P for 1 year, 5 year and 20 year returns. The S&P 500 beats gold over the last 10 years.

Even the prettiest horse in the glue factory ends up as.......glue.
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Old 04-27-2020, 02:12 PM   #7
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Originally Posted by upset264 View Post
..... Gold beats the S&P for 1 year, 5 year and 20 year returns. The S&P 500 beats gold over the last 10 years. ...
Typical comparisons are 1, 3, 5 and 10 years... not so great... but I'm glad it works for you.... good luck.

 Total Return 
 GLDSPY
2009-1Q20204.89%12.04%
Jan-Mar 20203.60%(19.43%)
1 year – 201917.86%31.22%
3 years – 2017-20199.24%15.08%
5 years – 2014-20193.52%11.88%
10 years. 2009-20194.67%14.56%
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Old 04-27-2020, 02:41 PM   #8
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We have 192 gold coins (Maple Leafs, Eagles, Swiss 20 Franc coins) that we have been holding for just over 20 years. I wanted to sell out in 2012 but my wife said absolutely not as she thought that gold would go to $5000 US. It fell back and is slowly inching back up to the 2011 peak. Hopefully I can convince her to sell out this time.
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Old 04-27-2020, 03:03 PM   #9
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Harry Browne Permanent Portfolio. Stocks, bonds, gold and cash. I dinked around with a 'mad Money' version involving gold, Platinum, silver coins including some 'collectables', timberland, rental RE, semiprecious stones, as well as dividend 'growth' stocks, REIT's and high yield bonds. Along with - psst Wellesley.

My inner child remembered coin and rock collecting.

By the 90's my plain vanilla 60/40 balanced index became 'the lead sled dog'.

heh heh heh - Still have a few coins rattling around the safe deposit box. Katrina altered my view of 'stuff.' 2006 went to Target Retirement except for under 5% 'mad money' which I count as a hobby.
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Old 04-27-2020, 03:05 PM   #10
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Quote:
Originally Posted by upset264 View Post
I bet those who do not consider gold and pm's a legitimate investment class would be surprised to learn that from Jan. 1, 2000 to date the GLD ETF returned 197.98% vs. 96.27% for the S&P 500. Gold beats the S&P for 1 year, 5 year and 20 year returns. The S&P 500 beats gold over the last 10 years.
Looks like you didn't include the reinvested dividends in the S&P 500 numbers. How about doing that to make an apples-to-apples comparison, and post the results.
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Old 04-27-2020, 03:16 PM   #11
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Quote:
Originally Posted by upset264 View Post
I bet those who do not consider gold and pm's a legitimate investment class would be surprised to learn that from Jan. 1, 2000 to date the GLD ETF returned 197.98% vs. 96.27% for the S&P 500. Gold beats the S&P for 1 year, 5 year and 20 year returns. The S&P 500 beats gold over the last 10 years.

Even the prettiest horse in the glue factory ends up as.......glue.
Quote:
Originally Posted by REWahoo View Post
Looks like you didn't include the reinvested dividends in the S&P 500 numbers. How about doing that to make an apples-to-apples comparison, and post the results.
REW, I think upset264 is blowing smoke. His post starts Jan 1, 2000 but GLD didn't start trading until Nov 2004. I wasn't a math major but something does not compute.

Maybe he would be "surprised to learn" that GLD didn't even exist as of the start of his comparison period.

Quote:
... SPDRŽ Gold Shares (NYSEArca: GLD) offer investors an innovative, relatively cost efficient and secure way to access the gold market. Originally listed on the New York Stock Exchange in November of 2004, and traded on NYSE Arca since December 13, 2007,
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Hows your Permanent Portfolio doing?
Old 04-27-2020, 04:10 PM   #12
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Hows your Permanent Portfolio doing?

Quote:
Originally Posted by REWahoo View Post
Looks like you didn't include the reinvested dividends in the S&P 500 numbers. How about doing that to make an apples-to-apples comparison, and post the results.


Sheesh! Just when I thought I might be able to start to reduce my recording keeping efforts, you have earned another year on my list of Dangerous Radicals Who Infest This Site.
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Old 04-27-2020, 04:18 PM   #13
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Answering OP, Wonderful!
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Old 04-27-2020, 05:42 PM   #14
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How do you feel about your "carrying cost" of gold in your safe vs shares in a ETF/fund? And the potential utility of each?

What is the plan to convert coins into something useful, quickly? Nobody will trade several thousand dollars worth of "stuff" for a shiny coin, except the coin store owner -- nobody else knows how to determine if the coin is fake. But he is only willing to buy a couple.

When you want to rebalance coins (to cash/equities/bonds), you send them to your "big" dealer in the mail, and do it when his posted BUY price spread is least unfavorable. When & why is that favorable / unfavorable, versus selling an ETF/fund ?
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Old 04-27-2020, 05:43 PM   #15
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Quote:
Originally Posted by upset264 View Post
I bet those who do not consider gold and pm's a legitimate investment class would be surprised to learn that from Jan. 1, 2000 to date the GLD ETF returned 197.98% vs. 96.27% for the S&P 500. Gold beats the S&P for 1 year, 5 year and 20 year returns. The S&P 500 beats gold over the last 10 years.

Even the prettiest horse in the glue factory ends up as.......glue.
Quote:
Originally Posted by pb4uski View Post
REW, I think upset264 is blowing smoke. His post starts Jan 1, 2000 but GLD didn't start trading until Nov 2004. I wasn't a math major but something does not compute.

Maybe he would be "surprised to learn" that GLD didn't even exist as of the start of his comparison period.
I'm certainly not a proponent of HB's Permanent Portfolio, but I do think that gold has kicked the butt of the S&P starting in 11/04 through today. Even with dividends included. But likely so have other assets. If I was to pop back in time 16 years or so I'd buy gold (and Apple).

I found a Forbes article on the best performing assets of this century. What's the Second Best Performing Asset Since 1999? Gold beats the S&P, but so do REITs. And no way I'm making either of those a mainstay of my portfolio. Having said that, I do own (too much) real estate, and wouldn't mind having some physical gold. Maybe after I make a killing with my market timing during this situation I'll cash some in and buy a few bars and coins.
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Old 04-27-2020, 06:00 PM   #16
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Originally Posted by pb4uski View Post
REW, I think upset264 is blowing smoke. His post starts Jan 1, 2000 but GLD didn't start trading until Nov 2004. I wasn't a math major but something does not compute.

Maybe he would be "surprised to learn" that GLD didn't even exist as of the start of his comparison period.
No deception intended. I entered 1/01/2000 in Yahoo Finance and didn't realize that it returned performance from inception in 2004 to date. Its called a mistake.
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Old 04-28-2020, 01:58 PM   #17
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I found a Forbes article on the best performing assets of this century. What's the Second Best Performing Asset Since 1999? Gold beats the S&P, but so do REITs.
On a risk-adjusted basis? Or maybe a volatility adjusted basis? Everybody puts a different priority on what is important. The PP is supposed to let you sleep at night with above (?) average performance.
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Old 04-28-2020, 03:22 PM   #18
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No deception intended. I entered 1/01/2000 in Yahoo Finance and didn't realize that it returned performance from inception in 2004 to date. Its called a mistake.
Ok, fair enough. Like I said... something did not compute.
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Old 04-28-2020, 03:55 PM   #19
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upset264, for the record here is an accurate comparison of gold vs the S&P 500 including dividends. From a recent Kiplinger's article.

Since 1980:
Quote:
Through April 9, with dividends reinvested, the S&P 500 has returned an annualized 11.2%...the yellow metal has delivered an annualized gain of just 2.8%.
Over the past 40 years, stocks beat gold by an annualized 8.4%.

Since 1990:
Quote:
The S&P 500 has gained 9.4% on an annualized basis with dividends reinvested since January 1990... And gold [had] an annualized gain of 4.9%.
Over the past 30 years, stocks beat gold by an annualized 4.5%.

Since 2000:
Quote:
The past 20 years have been gold's time to shine. Since January 2000, gold is up 9.3% on an annualized basis. Stocks [had] a return of 5.3% annualized...
Over the past 20 years, gold beat stocks by an annualized 4.0%.
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